Mistakes Made By Real Estate Investors

You must have heard a lot of people telling what to do when you are investing in real estate. However, people fail to mention what not to do. It is this part that is of utmost importance for Ottawa real estate investors. If you are an investor, you might not be very happy with your current portfolio with the falling market prices. If you want to continue to succeed you have to avoid the mistakes you have already made in the past and also avoid any other mistakes that you can make in the future.

The most common mistake that many investors make is that they are not focused on their investment plan. Either investors do not have a plan or they are easily distracted from the plan when they see new lucrative deals. If you stick to a thought out investment plan that is based on fundamental real estate principles, you will make more money and you will also minimize any risks your investment can face.

Ideally every investor would like to buy property that will grow in value over time; the rental income of the property will exceed the expenses and the equity will continue to grow with tenants paying for your mortgage. If you are buying property just because its value will increase over time, you are taking a huge risk which will most probably result in losses. Your focus should be properties that will generate enough income that you can take care of all expenses related to it and you are able save some profit.

Do not forget to measure all risks and rewards. People are always worried about return on investment. They should also consider the return on risk or return on time. Time is the most precious resource for an investor. The money lost can be regained in some way or the other, but the time lost on a particular investment can never be regained. You should always weigh the risks against the return that an investment is offering. Most investment opportunities that offer big returns come with big risks. If you are not able to manage the risks, you might end up draining your funds.

Another mistake that many real estate investors make is that they try to make the investments on their own. It might seem that you have all the information available on the internet and you can work out the deal on your own, but in reality this is not true. If you think that you are getting good return on your investments and you have managed to take care of them well without involving a real estate agent you are wrong. A real estate agent will help you manage your portfolio and will let you know of all the risks that are involved with your investment.

As a real estate investor it is very important to ensure that you avoid these mistakes. Contact your local Ottawa real estate agent today and save your investments while you still can!

Visit www.bennettpros.com for all your real estate needs.

 

Mistakes to Avoid When Selling a House

Do you have a house in Ottawa that you’re trying to sell? Are you trying to do it on your own or have you hired your relative for the job? In either case, it would be a good idea that you hire a proper real estate agent to sell your house. At Bennett Property Shop we help you avoid the common mistakes that can decrease your profits from the transaction.

It is important that you keep a close eye on the market at all times. You might get good money when you sell the property when the market is strong, but your profits will be used up in buying the new house. If you sell your house when the real estate market is not that strong, you will see that you can get a better price on your house when you add in some renovations and make it appear better in comparison to what the market has to offer. However, it is better to wait for the market to improve.

Your house should be priced according to current market trends, not according to what you think it is worth. If you have over-priced your house even slightly, people will reject it in favour of bigger houses that are available in the same price. At the same time, people who could afford your house at market rate would not even look at it because you have it priced out of their range.

You do not want to be one of those sellers whose house is on the market for a long time. By charging a bit more than the market, you could be delaying sale and in turn ruining your chances of getting full price. If your house is up for sale for more than a month do something! Talk to your real estate agent and review the price, make repairs or add improvements and incentives for buyers. Do not forget to hold an Open House to announce the changes.

Never ask a relative to sell your home under any circumstances. It is possible that you might end up selling it for less and after a prolonged duration. When you hire a real estate agent, do not forget to sign a contract with them with a guarantee of performance.

You should avoid telling exaggerations that would attract buyers but would disappoint them when they see the house. Try to keep a well maintained yard so that buyers are attracted. Keeping the inside of the house clean is a no brainer and something that should be done at all times. Make sure you are done with all the necessary repairs and that everything is squeaky clean.

You should avoid these costly mistakes and hire a good real estate agent in Ottawa to help you sell your house as soon as possible.

Visit www.bennettpros.com for all your real estate needs.

Buying Country Property

Whether you are buying a country property for the first time or the tenth, you will realize that there are some differences when you buy a property with features such as a well. Your Ottawa real estate agent will help you understand the different things that you have to check before you have the property transferred to your name.

One important thing that you will need to do is check the Offer to Purchase Agreement drafted by your real estate agent. It is vital that it includes a clause that allows you to test the water supply of the property. This will help in determining if the water is safe for usage and human consumption. Your agent will advise you against buying property in areas surrounding Ottawa that are known to have water problems.

Ground water can easily become contaminated. Different human activities lead to undesirable substances being added to the water. Such substances when left on or under the ground cannot be moved and are added to the water supply through the ground.

Ground water has been proven to cause the spread of the effects of spills and dumps to other regions far beyond the original site of contamination. There are two ways in which ground water can be contaminated: either through point sources or through non-point sources.

Point sources include leaking septic tanks, landfills, accidental spills and leaking gasoline storage tanks. Industrial waste disposal sites and municipal landfills are two of the most significant sources of this type of contamination. Non-point sources include any type of infiltration from farms that are treated with fertilizers and pesticides.

You might also want to test the water supply for a high content of sulphur, salt and iron. Your real estate agent will help you find the best water testing companies in Ottawa. You will also need to test the flow of water that is available for your family’s use.

If the property you are buying has a septic tank, it is again of utmost importance that you have it inspected by a professional engineer who deals with such systems. You might think that the inspection is costly, but it will save you thousands of dollars in replacement or upgrading the system in the future.

You do not have to go about getting the tests and inspections done yourself before purchasing. If you are buying a property that has a septic tank or a well, you can leave all these things to your Ottawa real estate agent. The agent will offer you the best care that is available and will give you details at every step.

Visit www.bennettpros.com for all your real estate needs.

 

New vs. Used - The Difference is in the System

The first question you will ask yourself when you decide to buy a home is if you should buy a new house or an older one? When you are looking through Ottawa real estate properties, you are bound to get confused. One thought that you may think is that older homes are built better than newer ones. On the other hand, there are also many reasons that may incline you towards choosing a new home over an old one.

Better Built

One thing you should know is that new technology has helped improve the construction process as well as the building material used during construction. Canadian Building Standards have improved drastically over the years. Most new townhouses and detached houses include at least two full bathrooms on the upper storey and a powder room off the entrance hall. Improved kitchen standards and laundry areas have also made the new homes more convenient and acceptable.

The concept of central air-conditioning was not available for condos in the 1970s. Now, however, this has changed. Also, a home office is another essential room that is now available in many new homes that wasn’t available a few years back.

Less Maintenance Required

A new home won’t require much maintenance for at least the first 10 to 15 years. This is usually because the building material used is more advanced and long lasting. The presently used vinyl-clad window frames don’t require frequent repairs unlike older wooden frames. Nor do you have to worry about roof repairs with every change in weather.

If you buy an old home, you will be worried about aluminum wiring and steel or lead plumbing. The brick front also adds to the durability of the new home.

Energy Efficient

Insulation standards have improved in all new homes and the furnaces installed are more energy efficient nowadays. Since 1993, basement insulation has become a common practice and the minimum ceiling heights have also been increased.

The flimsy windows have been replaced with double-glazed casement windows that help keep the cold drafts out and the warmth trapped in. The new Energy Star Program has helped bring down monthly energy costs for home owners.

Tarion Warranty

This new warranty has provided an added protection for new home buyers. It helps with all repairs and corrections that are required during the initial years of the home.

All homes in Ottawa are required to meet safety standards and smoke detectors are to be wired in with the updated electric systems. Older homes will have to replace aluminum wiring, if it has not already been done by the previous home owner.

Amenities

The newer communities in Ottawa are designed to make sure that parks and playgrounds are within walking distance. Different environmental factors have also been considered during the planning of these communities. There are some builders who specialize in creating small communities where children can grow up without worry.

Even with all these advantages, you will still have to cater to the one most important fact before you buy a house – Location. You will find that most of the best locations in Ottawa already have communities built and the houses that are available are all resale. Therefore, check with your Ottawa real estate agent and find the best house for your family.

Visit www.bennettpros.com for all your real estate needs.

Mortgage FAQs

Once you find your dream home in Ottawa you will need to look at your different mortgage solutions.

Mortgage solutions are provided by many bankers and mortgage brokers in Ottawa and other cities in Canada. Though there are many things you have to consider about mortgage payments, there are a few questions that are frequently asked by Canadians who are looking for a good mortgage plan and payment solution.

Why hire a mortgage broker when the Bank is there?

When you deal with a bank for the mortgage solution, you are bound by the list of products they have. It is possible that the list does not have the best solution for you. Also, banks have to think about their profit margin and will offer you the highest rate that is acceptable to you. A mortgage consultant on the other hand will have a list of lenders and mortgage products. You could potentially benefit from lower interest rates. However, if you are buying a new home or condo that is not built and you require a pre-approval letter, you must go through a bank, because a mortgage broker cannot guarantee the rate for long enough.

What fee charges are involved?

Typically there is no fee. The lenders who receive your mortgage application hand a certain amount of commission to mortgage consultants. If your application is not accepted because of job instability or bad credit, you are subjected to brokerage fee.

Do I have to wait for my mortgage to mature?

It is not a good idea to wait for that long. You should inform your mortgage consultant around 4 months before the time of maturity of your mortgage. During this time, the consultant can easily shop for other mortgage rates and your mortgage will be easily transferred if there is a possibility.

I recently heard of Mortgage Loan Insurance. What is it?

Mortgage loan insurance is required by law and is provided by three major companies in Canada: AIG Insurance, Genworth Financial Canada and Canada Mortgage and Housing Corporation (CMHC). Do not confuse this with mortgage life insurance. Here the lenders are ensured against default on mortgages with an 80% ratio of loan to value. Borrowers pay insurance premium between 0.5% and 3.7% which is directly added to the mortgage account.

What is a high-ratio mortgage and how is it different from conventional mortgage?

Conventional mortgage is the typical mortgage where the down payment is equal to 20% or more of the property’s purchase price and there is no mortgage insurance required for it.

High-ratio mortgages are where the down payment is less than 20% of the purchase price. You are required to attain mortgage loan insurance from one of the three companies that provide insurance. The borrower is allowed to purchase the house with a small amount of down payment and the lender is also protected with the loan insurance.

What form of down payment is acceptable?

If you have cash, then it is good. If, however, you do not have cash, you can use:

•             Accumulated savings

•             Sales proceeds that you gain from an existing house

•             Your Registered Retirement Savings Plans (RRSP). Up to $20,000 can be used for down payment and if it is repaid within 15 years it will not be subjected to income tax.

•             Investments that are not registered

•             Borrowings from an unsecured Line of Credit.

Visit www.bennettpros.com for all your real estate needs.

The Challenges of Downsizing

Shifting from a big house to a small one, contrary to popular belief, is really not that big a deal. There can be multiple reasons for making such a move. Possibly, you have grown old and your kids have moved out or you are unable to keep up with the mortgage payments or it may just be too difficult to manage the huge space on your own. Whatever the reason may be, a major problem is finding the right house for your needs. If you are looking through real estate properties in Ottawa, you will be surprised with all the options that are available.

Once you have found the perfect new home, another challenge involved with downsizing is managing all your old stuff. Your currently large house is not only filled with pieces of furniture, it also has a few decoration items that are strewn around the room. You might want to box up and keep all the pieces for sentimental or other reasons. They could be family heirlooms, pieces you inherited or things that were given to you by a loved one.

Not to mention all the stuff stored in the attic. Though those things initially may seem worthless to keep, that emotional attachment you have to your old diaries is hard to let go. It is entirely up to you to decide what things you want to keep in the new place and what things you want to throw or give away. You must remember that you cannot take everything with you and you should be ready to let go of all the things that may hold sentimental value but are not required in your new place.

To avoid the different issues and nerve-wrecking symptoms of downsizing, make sure that you follow the following tips:

•             Time your move. If you are shifting to a house that is half the size of your current one, there are a lot of things that you will have to toss out or keep in a storage container. You have to give yourself time to think through and decide on the stuff that you will keep and the stuff that you won’t.

•             Get help. Ask your friends and family to help you with the move. Have one of them organize an online sale while others can take care of boxing away items.

•             Be realistic. There are so many things that we can easily live without but we have made them necessities. Measure the rooms of the new place and see which furniture can be placed in them. You might have to sell some of the pieces.

•             There is no need to keep a pile of papers. Except for property and tax papers, most of them would not be needed after a certain time. So throw away those college assignments that you have stowed away in the attic.

•             A storage unit should be your last resort. Try to avoid renting a storage unit. Most of the people who have rented one do not even use it and the things usually rot inside.

Even though there are many challenges involved with downsizing, you can make it a fun process. Contact the Bennett Property Shop Realty today to find the best real estate property in Ottawa for your downsizing needs.

 

Visit www.bennettpros.com for all your real estate needs.

Understanding Builder Warranties – Tarion: What is it?

Tarion is a private corporation that was built around 30 years ago. The company has the sole purpose of protecting the rights of home buyers and regulating new home builders. The responsibility of the company includes controlling of the Ontario New Home Warranties Plan Act in different cities of Ontario including the real estate in Ottawa.

The new head of the company is concerned that many new home owners are not aware of the exact amount of coverage they are entitled to. In September, he addressed the Greater Ottawa Home Builders’ Association and reinstalled the concept that buyers had to be educated.

Tarion was built to protect new buyers and control builders by making sure that there were no signs of shoddy workmanship. New average mid-sized homes must come with a warranty. The warranty costs around $1,000 and is usually passed from the builder to the buyer. The warranty covers the first seven years of the new house.

The first year of the warranty covers all aspects of workmanship. The second year covers building code and operating systems. The remaining years of the warranty focus on all major structural defects. It is important that all new houses are registered for warranties by the builders. Any new home that is built and sold with an Agreement of Purchase and Sale without a warranty would be categorized as an illegal building, certain acceptations do exist see below. Another way that builders can trick new home buyers is that they build the house as consultants and register the building permit in the buyer’s name. This legally makes the buyer responsible for all problems they face during the initial year and they cannot do anything about it.

If you buy a home from a registered builder you still need to understand the terms of warranty that are applicable to your property. Houses are made with natural material and therefore are subject to change. The issues related to these changes are mostly resolvable and if they are not, they can be sent to conciliation.

If you are buying a resale home that was built less than seven years ago, the house is still under warranty and the previous owner has no right to withhold the warranty. Buyers are also encouraged to send their warranty forms within 30 days, for a one or two year warranty term and register themselves at MyHome section on Tarion’s website.

There are a few types of homes that are not subjected to builder warranties: condo conversions, vacant land condos, common element condos, owner-built homes, modular homes, as-built homes, model homes, mobile homes and shell homes among a few others. You must remember to ask all the necessary questions to your real estate agents in Ottawa.

The new changes in the warranty program have helped Canadian buyers and home builders improve standards and make better decisions. For further information contact visit www.bennettpros.com.